Gekko had a lot of positive things to say about greed, and in some respects he is right. If an improved bottom line is the result of “greed,” then many companies could stand to be a little greedier.
But it also blinds and causes people to act in ways that can lead to harmful results. Let me share some perspectives on how greed can impact the possible sale of your printing business in two ways.
1. It Can Affect the Owner and the Buyer
It’s unfortunate that an M&A can be considered an adversarial relationship, because ultimately, both buyer and seller should be working to assure a company’s future. It’s in everyone’s best interests to find a price and an arrangement that works for the benefit of the company.
But sometimes an owner or a buyer feel like a price is either too high or too low. There are many ways to avoid this situation, including a third-party appraisal. But sometimes all people will see are dollar signs, not the truth.
2. It Can Affect the Intermediaries Involved
Call me a whistle-blower, but I’m tired of seeing merger and acquisition intermediaries working for their own benefit, and not for their clients. It’s not surprising, considering many M&A transactions involves extremely high purchase prices and significant commissions for intermediaries. In successful transactions, these commissions are well-earned, as these are complicated, time-consuming deals.
But pushing through a deal so you can realize those sizable commissions helps no one. A poorly executed acquisition hurts the buyer, the seller, the employees, the customers and the families of all involved.
The way to avoid the greed scenario is to remember these strategies, no matter what your role in an M&A: Get an accurate, industry-specific business valuation. This will ensure that all negotiations are based on a set of impartial numbers.
Keep your eye on revenue and profits DURING the sale. Maintaining and growing sales will help the company remain profitable and grow the foundation for the future. Instead of imagining your future earnings, focus on the present ones.
Work with a team, not by yourself. I’ve seen owners try to save money by conducting the sale of their business by themselves. Unfortunately, this is like greed in reverse. If you go it alone just to avoid any fees, you’re going to wind up costing yourself more in the long-run by not maximizing your selling price.
Those are just a few reasons greed is not good -- I’ve detailed others in this post. The point of all of these tips is that if you truly want to make money, then focus on executing a successful transaction for all involved.
Rock LaManna is the author of L&NW's popular column, The Bottom Line. Rock helps printing owners and CEOs use their company financials to prioritize and choose the proper strategic path. He is President and CEO of the LaManna Alliance, and provides guidance on how to grow a printing business, merge with a synergistic partner, make a strategic acquisition, or create a succession plan. Rock can be reached by email at Rock@RockLaManna.com.